/View.info/ The bank collapsed in less than 30 hours
The best financial analysts are scratching their heads trying to dig out the “roots and threads”, as Saltykov-Shchedrin would say, of the sudden collapse of the largest high-tech bank in the United States (and the second in the world after Israel’s Bank Leumi ) bank of hi-tech
It is America’s biggest bankruptcy since the collapse of Lehman Brothers on September 15, 2008, which triggered a “perfect storm” with devastating consequences.
There is every reason to believe that SVB’s downfall is a planned action by US authorities that has pushed American tech startups down the social ladder and hurt Chinese tech startups. The collapse of SVB was orchestrated, among other things, in the interests of Wall Street giants.
Let’s start with the personalities. Joseph Gentile, CEO of SVB Securities, prior to joining SVB in 2007, served as Chief Financial Officer at Global Investment Bank Lehman Brothers, where he led accounting and finance matters.
“Gentile’s relationship with Lehman and SVB literally blew up social media,” wrote Breitbart. The most politically correct comment on social media: “This is really unusual” (This is truly unusual).
Gentile was not the central figure of SVB. The decisions were made by another person who really knew about the impending collapse and made sure that his interests were not affected.
This is Gregory Becker, president and CEO of SVB and a member of the board of directors of the Federal Reserve Bank of San Francisco. SVB’s office is in Santa Clara, California, and Becker represented the US Federal Reserve at the bank.
On February 27, Becker sold $3.57 million worth of SVB stock that he had owned just two weeks before its collapse. He sold 12,451 shares at an average price of $287.42 each. SVB CFO Daniel Beck sold 2,000 shares at $287.59 per share on the same day. The stock, which Becker sold for between $285 and $302, was worthless immediately after the bank’s sudden collapse.
In the 24 hours before SVB’s bankruptcy, Becker personally called customers to reassure them that their money was safe in the bank.
On the day of SVB’s bankruptcy, Becker resigned from the board of directors of the San Francisco Federal Reserve.
California congressman Democrat Ro Hanna said in an interview with The Washington Post that Becker should return the $3.6 million obtained from the sale of the shares to investors. Hanna added that if malice is proven in Becker’s actions, then “the government should prosecute him”.
In the immediate aftermath of SVB’s bankruptcy, former Treasury Secretary Larry Summers said “due to recent events, some consolidation may be necessary” in the banking sector. According to him, this could be a test for the regulators. A number of Democrats have pushed for curbs on bank mergers.
For example, Senate Banking Committee Chairman Sherrod Brown called last year to “ensures that bank mergers, if approved, serve American families, small businesses and communities, not Wall Street and big corporations.”
Not at all concerned to serve “American families, small businesses and communities,” Summers warned that “one of the mistakes authorities can make is … to block combinations that will ultimately work for financial stability.”
SVB was the main foreign bank for most of the Chinese startups and venture capital funds that were “literally dumbfounded by the sudden collapse of this bank”writes Reuters.
„The collapse of Silicon Valley Bank has left many Chinese funds and tech startups reeling, as the collapsed institution served as a key financial bridge for groups operating between China and the US. The sudden takeover of SVB by US regulators also cast doubt on the fate of its joint venture in China with Shanghai Pudong Development Bank, which maintains a separate balance sheet and total assets of 21 billion yuan ($3 billion)….
The flight from SVB happened so quickly, $42 billion left the bank’s coffers on Thursday [9 март] – that by the time China’s decision makers woke up on Friday morning local time, trying to save their money was already almost pointless.” notes the Financial Times.
„SVB was particularly popular among Chinese biotech groups operating between the US and China. More than a dozen technology and life sciences companies trading in Hong Kong have named SVB as their primary bank, which could put millions of dollars earmarked for long-term clinical development programs at risk.
„Why did the bank collapse in less than 30 hours? In the entire history of the banking system, there has not been a single precedent for such a rapid liquidation of a bank (from the time of the first disclosure of information to the liquidation commission), at least with assets over $10 billion … Considering the size of the bank, there is no doubt , that it was with the direct approval of Yellen and Powell. For what?” – they write in the Russian financial forums.
You don’t have to look far for an answer. Only the swift liquidation of SVB deals a double blow – to American and Chinese start-ups – and opens the door to consolidation of the banking sector in the interest of Wall Street giants, which was immediately called for by Larry Summers, who said that “now is not the time for moral hazard lectures.”
„Finance capital doesn’t want freedom, it wants domination.” writes V.I. Lenin in his book “Imperialism as the Highest Stage of Capitalism”. In 1968, Martin Luther King Jr. reaffirmed this maxim in other words: “So often in America we have socialism for the rich and raw free enterprise capitalism for the poor.”
„Silicon Valley is learning to love socialism for the rich. The same people who gutted the banking rules now want to be protected from the disaster they caused” writes The Nation.
Translation: ES
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